Consumer Duty at two: Progress, partnership, and the path ahead

This month marks two years since the FCA’s Consumer Duty came into force - a piece of regulation that has reshaped the way financial services firms think about their customers.  

Creating better outcomes for people 

 The Duty required a fundamental shift in mindset, and two years on, we’ve seen real change across the sector - from lenders and credit brokers to debt collectors and debt advice providers. This includes: 

• Better identification of vulnerable customers: some firms now cross-check new customers against external vulnerability registers, helping them to ensure tailored support from day one. 

• Improved partnership working: others are working with consumer bodies to signpost customers to debt advice or money health check services where needed. 

• Providing clearer communication: many firms have redesigned consumer information and their websites to improve accessibility. One firm reduced the reading age of its content, leading to a 36% drop in complaints. 

• Digital innovation: firms have invested heavily in their digital offerings, providing online portals for customers to manage their accounts, and created solutions to help people check for additional benefits they may be entitled to.  

• Improving fair value: we’ve worked with firms to look at whether they’re providing fair value, which has led to product withdrawals, redesigns, and better outcomes for customers. 

Changing how we work 

 Looking internally, the Duty has also helped reshaped how we supervise, develop policy and enforce:  

• There has been a shift in how we engage with firms, so the Duty becomes central to our ongoing conversations and proactive engagement.  
• We regularly work in partnership with industry to raise awareness and help firms understand our expectations.  In early July our senior leadership team also met a wide range of businesses at ‘Credit Week’. 

• On our policy approach, we are reviewing the financial promotion rules for Consumer Credit and will consult on removing unnecessary prescription, updating outdated requirements and improving alignment with the Duty. 

• For Buy Now Pay Later (Deferred Payment Credit) regulation, we’re proposing a proportionate regime that relies on existing rules, including the Duty, rather than proposing lots of new ones. 

• We’ve launched targeted workstreams on consumer understanding and support, including: 

• A review of digital journeys, published today. 

• A study of how consumers understand credit card terms, especially around promotional offers. 

• And we’re supporting the development of a pilot ‘Smaller Firm Guide’, recognising that most of our 35,000 consumer finance firms are small or medium-sized. 

 The Consumer Duty has been a catalyst for cultural change. As we take stock of what we have achieved over the last two years, we must be mindful that embedding the Duty is not a ‘once and done’ exercise, but a long-term journey.